Template-type: ReDif-Paper 1.0
Author-Name: Perea Andres
Author-Name: Peters Hans
Author-Name: Schulteis Tim
Author-Name: Vermeulen Dries
Author-workplace-name: METEOR
Title: Stochastic dominance equilibria in two-person noncooperative games
Abstract: Two-person noncooperative games with finitely many pure strategies and ordinal preferences over pure outcomes are considered, in which probability distributions resulting from mixed strategies are evaluated according to t-degree stochastic dominance. A t-best reply is a strategy that induces a t-degree stochastically undominated distribution, and a t-equilibrium is a pair of t-best replies. The paper provides a characterization and existence proofs of t-equilibria in terms of representing utility functions, and shows that for t becoming large-which can be interpreted as the players becoming more risk averse-behavior converges to a specific form of max-min play. More precisely, this means that in the limit each player puts all weight on a strategy that maximizes the worst outcome for the opponent, within the supports of the strategies in the limiting sequenceof t-equilibria.
Keywords: microeconomics ; 
Series: Research Memoranda
Creation-Date: 2005
Number: 004
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:d5f640b0-ff6b-4eb9-874a-2b0603afbedd/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 243668
Handle: RePEc:unm:umamet:2005004